Ireland ordered to take big bite of Apple taxes

In a largely expected but still stunning ruling by the European Union’s antitrust commission, Ireland is being ordered to collect €13 billion ($14.5 billion) of back taxes from tech giant Apple. Details of the 30 August decision are still developing.

Unsurprisingly, Irish Finance Minister Michael Noonan “disagrees profoundly” with the ruling. In an official statement, he said:

Ireland’s position remains that the full amount of tax was paid in this case and no State aid was provided. Ireland did not give favorable tax treatment to Apple. Ireland does not do deals with taxpayers.

Apple distribution center near Cork city.

The Irish Times says the penalty “is far in excess of what had been envisioned by Irish authorities,” and that the State will appeal the decision. In an analysis, Cliff Taylor writes:

The scale of the finding means that the whole issue of multinational tax will be front and center again in international business debate, and this is bound to spark off serious tensions between the European Commission and the U.S., which will be furious at what has happened.

Ireland is caught right in the middle. It is a decision which will involve significant collateral damage for Ireland, which has always claimed to have a transparent and legally based tax system.

Ireland’s 12.5 percent corporate tax rate is one of the lowest in the developed world. As The New York Timesreports:

Other incentives and breaks allow companies to cut their bill even further. While it is phasing out some of the more contentious loopholes, Ireland just introduced a new break for revenues on intellectual property, a potentially huge benefit to large technology companies with troves of patents.